S&P puts Brazil's rating on negative outlook.

June 6 (Reuters) - Credit rating agency Standard & Poor's revised its outlook on Brazil's foreign currency sovereign rating from "stable" to "negative" on Thursday, citing weak economic growth and expansionary fiscal policy.

Currently, the long-term rating assigned to the country by S&P is "BBB", one step above the floor of the investment grade range.

"We may downgrade the rating in the next two years if continued slow economic growth, weak fiscal and external fundamentals, and some loss of credibility in fiscal policy due to ambiguous policy signals, diminish Brazil's ability to manage an external shock," said S&P.

According to the agency, delays in implementing measures to boost private investment, especially in infrastructure, could contribute to low GDP growth this year and next, increasing the risk of further fiscal weakening and higher public debt costs.

The agency stated, however, that it may revise the outlook for Brazil's rating to "stable" if more consistent initiatives generate greater confidence in the private sector and, therefore, greater growth.

S&P projects Brazil's GDP will expand by only 2,5 percent in 2013.

Farm

Brazil's Finance Ministry stated on Thursday that the country is on a path of growth and that the government continues to generate one of the world's largest fiscal surpluses, after credit rating agency Standard & Poor's placed the country's sovereign rating on a "negative" outlook.

According to the Secretary of Economic Policy at the Ministry of Finance, Márcio Holland, the ratio between Brazil's debt and Gross Domestic Product (GDP) continues to fall, and the country's average growth outlook is above the world average.

(By Luciana Otoni and Bruno Federowski)